Oil and macroeconomic fluctuations in Ecuador

Resumen

This paper sets out to test the conventional contention that the Ecuadorian economy has been totally dependent on fluctuations in the international oil market since the 1970s. It does this through the use of univariate statistical techniques in the first part, while it resorts to the econometric structural break test and impulse response analysis respectively in the final two parts. Its findings take issue with intuition and conventional wisdom, in that: first, they do not establish the international oil market as the prime mover of the economy; secondly, they provide no evidence that the real and trade sectors evolve necessarily in accordance with fluctuations in the oil sector; and thirdly, they call for a multicausal view of economic fluctuations in Ecuador.